Commerzbank CEO offers to resign to give bank a fresh start

imageStock Markets3 hours ago (Jul 03, 2020 01:35PM ET)

(C) Reuters. FILE PHOTO: Germany’s Commerzbank AG hold their annual results press conference in Frankfurt

FRANKFURT (Reuters) – Commerzbank (DE:CBKG) Chief Executive Martin Zielke offered to resign on Friday to open the way for a fresh start for the German lender, which has been under pressure from some investors over its poor financial performance.

The bank said its supervisory board would recommend to the broader Commerzbank board that it accept Zielke’s offer and a decision would be made at a July 8 board meeting.

Zielke was meant to present a strategy update to the board this week but the chief executive, in the top spot for four years, has struggled to persuade some investors that he can turn the bank around after a previous effort failed.

“I would like to open the way for a fresh start. The bank needs a profound transformation and a new CEO, who gets the necessary time from the markets to implement a strategy,” Zielke said in a statement.

Supervisory board chairman Stefan Schmittmann also offered to resign and Commerzbank said he would step down on Aug. 3.

The bank’s leadership has come under increased pressure in recent weeks from one of its top investors, Cerberus, which has called for management and other changes.

Cerberus, which bought a 5% stake in Commerzbank in 2017, began an activist campaign to force the lender to change strategy and hand the U.S. investor two seats on its supervisory board early last month.

Cerberus was not surprised by the resignations, though it was surprised by the timing, a person close to the investor told Reuters, adding that it would work with the government and bank staff to fill the vacuum.

The state, which owns almost 16% of Commerzbank, is its largest shareholder. The Finance Ministry said it was fully committed to its engagement with the bank.

“Commerzbank plays a central role in the financing of small and medium businesses and exports,” the ministry said in a statement.

The 150-year-old Commerzbank has struggled this year, posting a first-quarter loss, halting its 2019 dividend plans, backtracking on the sale of its Polish lender mBank (WA:MBK), and losing a long-standing sponsorship deal with a local soccer team to rival Deutsche Bank (DE:DBKGn).

Bailed out by the state during the last financial crisis, Commerzbank has also warned that its target for turning a profit in 2020 now seems “very ambitious” because of the COVID-19 pandemic.

Commerzbank CEO offers to resign to give bank a fresh start

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